HP 2005 Annual Report Download - page 36

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(3) Net earnings (loss) before cumulative effect of change in accounting principle includes the
following items:
2005 2004 2003 2002 2001
In millions
Losses (gains) on investments and early extinguishment of
debt ....................................... $ 13 $(4) $29 $75 $419
Dispute settlement .............................. 106 70 — (14) 400
Total losses before taxes .......................... $119 $66 $29 $ 61 $819
Total losses, net of taxes .......................... $ 73 $56 $23 $64 $565
(4) Staff Accounting Bulletin No. 101, ‘‘Revenue Recognition in Financial Statements’’ (‘‘SAB 101’’),
was adopted by HP in fiscal 2001. SAB 101 established that revenue is recognized when persuasive
evidence of an arrangement exists, delivery occurs or services are rendered, the sales price is fixed
or determinable and collectibility is reasonably assured. The cumulative effect of this change in
accounting principle in fiscal 2001 was $272 million, net of related taxes of $108 million.
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